David Crow focused on product design, customer development and go-to-market implementation on $0. He is available as a consultant. He is a mentor at UW VeloCity, Jolt and FounderFuel. Follow him on Twitter @davidcrow or at DavidCrow.ca

Metrics

Cost Per Acquisition (CPA)

How much does it cost you to get a customer? It’s a simple enough calculation, how much do you spend on sales and marketing to acquire each customer. Roll up your staffing costs, your ad buys, your outbound marketing, etc.

Average Revenue Per User (ARPU)

How much revenue do users generate? How do you track it? Does it change based on segment? How do you increase it?

Churn

What percentage of your existing customer base leave every month? This is different than CPA because this is about customer satisfaction and retention. Don’t think this is important? According to April Dunford churn is a killer. “The probability of selling to an existing customer is 60-70%. The probability of selling to a new prospect is 5-20%”

Lifetime Value (LTV)

How long does a customer continue as a subscriber? Does their ARPU change over time? Do you have ways to increase their spend or reduce their churn?

It seems so simple on surface, but as CEOs and startups we need to be committed to building the systems and metrics into our products. I was just floored at MeshU when I heard Dan Martell talk about the Flowtown.comStartup Immune System where they are beginning to use the lower level business performance metrics to automatically rollback design changes based on performance against the baseline. You can only start doing if you’re building on top of metrics. The idea of having automated your software deployment and sufficiently built business metric baselines that you could autoroll back poor performing changes. At Nakama, I wanted this so much. Not because I had bad developers but because we often made design decisions based on limited customer feedback and I wanted the system to protect me from my own hubris.

Metrics are good place to start. One of the best ways to understand how your company is performing is to begin measurement. Mike has done a great job

Related

David Crow focused on product design, customer development and go-to-market implementation on $0. He is available as a consultant. He is a mentor at UW VeloCity, Jolt and FounderFuel. Follow him on Twitter @davidcrow or at DavidCrow.ca

I'm all about metrics for startups. In fact, right after I make sure we have enough cash, the next priority is to make sure we're instrumented to measure what matters. Here's an example of one of the dashboards we have built: http://www.startupcfo.ca/?p=1302

http://startupcfo.ca/ Mark MacLeod

I’m all about metrics for startups. In fact, right after I make sure we have enough cash, the next priority is to make sure we’re instrumented to measure what matters. Here’s an example of one of the dashboards we have built: http://www.startupcfo.ca/?p=1302

http://startupcfo.ca startupcfo

I’m all about metrics for startups. In fact, right after I make sure we have enough cash, the next priority is to make sure we’re instrumented to measure what matters. Here’s an example of one of the dashboards we have built: http://www.startupcfo.ca/?p=1302